Franchise Compliance Guide
Which states require franchise brokers, consultants, and sales agents to register before selling franchises? A complete state-by-state guide for 2026, including the new California Franchise Broker Registration Act.
3
States Requiring Broker Registration
5
States Considering Legislation
43
States with No Broker Requirement
A franchise broker (also called a franchise consultant, sales agent, or referral agent) is anyone who helps match prospective franchisees with franchise brands, typically earning a commission on each sale. This includes independent brokers, franchise consulting firms, and in-house sales teams.
While the federal FTC Franchise Rule requires franchisors to provide a Franchise Disclosure Document (FDD) to prospects, it does not mandate broker registration. However, some states have enacted their own broker registration requirements that go beyond federal law.
Key distinction: Franchise broker registration is separate from franchisor FDD registration. A state may require franchisors to register their FDD without requiring individual brokers to register separately (and vice versa).
In 2024, the North American Securities Administrators Association (NASAA) proposed a Model Franchise Broker Registration Act. A revised version was released for public comment in July 2025. If adopted by individual states, this model law would establish standardized broker registration requirements nationwide. California's SB 919 is the first state law modeled on this framework. Expect more states to follow.
REGISTRATION REQUIRED
Franchise brokers must file a separate broker registration application with the NY Attorney General. Requires detailed personal and business disclosure, background check, and fee.
REGISTRATION REQUIRED
Anyone offering or selling franchises in Washington must register as a franchise broker. Separate registration form required with background disclosure.
REGISTRATION REQUIRED
SB 919 (Franchise Broker Registration Act) signed into law, effective July 2026. Requires annual registration with the Dept. of Financial Protection and Innovation, pre-sale disclosure documents, and background checks.
POTENTIAL FUTURE REQUIREMENT
Registration state for franchisors. No separate broker registration yet, but NASAA Model Franchise Broker Registration Act could influence future legislation. Franchise brokers may need to comply with general business opportunity laws.
815 ILCS 705/1 et seq.POTENTIAL FUTURE REQUIREMENT
Registration state for franchisors. No broker-specific registration. However, the Franchisee Protection Act (2026) and NASAA Model Act influence may trigger broker legislation.
Md. Code, Bus. Reg. § 14-201 et seq.POTENTIAL FUTURE REQUIREMENT
Registration state with strong franchisee protections. No broker registration requirement. State has historically expanded franchise regulations and may follow NASAA Model Act.
Minn. Stat. § 80C.01 et seq.POTENTIAL FUTURE REQUIREMENT
Not a registration state for franchisors. However, MA has considered franchise relationship legislation. NASAA Model Act could be introduced in future sessions.
M.G.L. c. 93A (consumer protection)POTENTIAL FUTURE REQUIREMENT
Business opportunity law state. Franchise offerings may fall under CT Business Opportunity Investment Act if structured as biz opps. No franchise broker registration.
Conn. Gen. Stat. § 36b-600 et seq.| State | Franchisor Reg? | Details |
|---|---|---|
| Texas | No | Filing state only. No franchise broker registration. Franchisors must file a notice with the Secretary of State but no broker-specific requirements. |
| Florida | No | Filing state only. No franchise broker registration. Sellers of business opportunities must file with the Dept. of Agriculture but franchise brokers are exempt. |
| Georgia | No | Not a registration or filing state for franchisors. No franchise broker registration requirement. Only federal FTC Franchise Rule applies. |
| Ohio | No | Not a registration state. Business opportunity purchasers protection act may apply to certain franchise structures. No broker registration. |
| Pennsylvania | No | Not a registration state. Franchise brokers subject only to FTC Rule. No state-specific registration or filing for brokers. |
| New Jersey | No | Not a registration state. NJ Franchise Practices Act applies to relationships but not pre-sale registration. No broker registration. |
| Colorado | No | Not a registration state. The Colorado Securities Act may apply to investment-related franchise offerings but no franchise-specific broker registration. |
| Arizona | No | Not a registration state. No franchise broker registration. Only federal FTC Rule applies. |
| Nevada | No | Not a registration state. No franchise-specific broker registration. |
| Tennessee | No | Not a registration state. Tennessee Consumer Protection Act applies. No broker registration. |
| North Carolina | No | Not a registration state. Business opportunity law may apply. No franchise broker registration. |
| Michigan | Yes | Registration state for franchisors. No separate broker registration requirement. |
| Virginia | Yes | Registration state for franchisors. No separate broker registration. Franchise relationship law prohibits cancellation without reasonable cause. |
| Indiana | Yes | Registration state for franchisors. No separate broker registration. |
| Hawaii | Yes | Registration state for franchisors. No separate broker registration. |
| Rhode Island | Yes | Registration state for franchisors. No separate broker registration. |
| South Dakota | Yes | Registration state for franchisors. No separate broker registration. |
| North Dakota | Yes | Registration state for franchisors. No separate broker registration. |
| Wisconsin | Yes | Registration state for franchisors. No separate broker registration. |
| Kentucky | No | Filing state for business opportunities. No franchise-specific broker registration. |
| Utah | No | Filing state. Business opportunity disclosure requirements may apply. No franchise broker registration. |
| Maine | No | Not a registration state. No franchise broker registration. |
| New Hampshire | No | Not a registration state. No franchise broker registration. |
| Vermont | No | Not a registration state. No franchise broker registration. |
| Oregon | No | Not a registration state. No franchise broker registration. |
| Alabama | No | Not a registration state. No franchise broker registration. |
| Alaska | No | Not a registration state. No franchise broker registration. |
| Arkansas | No | Not a registration state. No franchise broker registration. |
| Delaware | No | Not a registration state. No franchise broker registration. |
| Idaho | No | Not a registration state. No franchise broker registration. |
| Iowa | No | Not a registration state. Has a franchise relationship act. No broker registration. |
| Kansas | No | Not a registration state. No franchise broker registration. |
| Louisiana | No | Not a registration state. No franchise broker registration. |
| Mississippi | No | Not a registration state. No franchise broker registration. |
| Missouri | No | Not a registration state. No franchise broker registration. |
| Montana | No | Not a registration state. No franchise broker registration. |
| Nebraska | No | Not a registration state. No franchise broker registration. |
| New Mexico | No | Not a registration state. No franchise broker registration. |
| Oklahoma | No | Not a registration state. Has a relationship law for specialized industries. No broker registration. |
| South Carolina | No | Not a registration state. S.1007 (Franchise Act of 2026) pending for joint employer clarification. No broker registration. |
| West Virginia | No | Not a registration state. No franchise broker registration. |
| Wyoming | No | Not a registration state. No franchise broker registration. |
| District of Columbia | No | Not a registration state. No franchise broker registration. |
These 14 states require franchisors to register their FDD before offering or selling franchises. This is separate from broker registration.
NY
New York
WA
Washington
CA
California
IL
Illinois
MD
Maryland
MN
Minnesota
MI
Michigan
VA
Virginia
IN
Indiana
HI
Hawaii
RI
Rhode Island
SD
South Dakota
ND
North Dakota
WI
Wisconsin
Determine your registration states
If you or your clients operate in NY, WA, or CA, you must register as a franchise broker.
Prepare disclosure documents
Gather personal and business history, background check materials, and any required financial statements.
File registration applications
Submit to the appropriate state agency (Attorney General or Dept. of Financial Protection). Allow 30-60 days for review.
Comply with pre-sale disclosure
In registered states, deliver broker disclosure documents to prospective franchisees before any sales activity.
Monitor NASAA Model Act adoption
More states are likely to adopt broker registration requirements. Track legislation on our Franchise Legislation Tracker.
Renew annually
Broker registrations must be renewed each year. California's new law requires annual renewal with the DFPI.
It depends on the state and your compensation structure. In NY, WA, and CA, anyone who earns compensation for facilitating a franchise sale generally must register as a broker, even if they only refer leads. Check each state's specific definition of "franchise broker."
No. FDD registration is required of franchisors in 14 states. Broker registration is required of individual brokers or sales agents in 3 states (NY, WA, and soon CA). They are separate processes with separate applications.
In states with broker registration requirements, selling franchises without registration can result in civil penalties, rescission rights for franchisees (they can get their money back), and potential criminal misdemeanor charges. Fines vary by state but can reach $10,000+ per violation.
No. The FTC Franchise Rule (16 CFR Part 436) requires franchisors to provide an FDD to prospects, but it does not mandate broker registration. State laws are what create broker registration requirements.
Likely yes. The NASAA Model Franchise Broker Registration Act (proposed 2024, revised 2025) provides a template for states to adopt. California's SB 919 is the first implementation. Expect 3-5 additional states to introduce broker registration legislation in the 2026-2027 legislative sessions.
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Browse FranchisesLast updated: April 2026. This guide is for informational purposes only and does not constitute legal advice. Consult a franchise attorney for compliance guidance specific to your situation.